Kate Andrews Kate Andrews

Will furlough be extended?

Chancellor Rishi Sunak visiting the Emma Bridgewater ceramics factory earlier this month (Credit: UK Treasury)

When Chancellor Rishi Sunak extended the furlough scheme back in May, he committed more support than anyone expected. In June and July, the government continued to pay 80 per cent of employee wages (with a cap of £2,500 per month) and has also picked up the majority of the tab in August and September. 

But as the scheme comes to an end after 31 October, calls have grown louder for it to be extended again. So far Sunak has been adamant that it won’t be, telling the House of Commons in July that it could not continue forever. But, as with many Covid-19 policies over the past six months, it appears this may be about to change.

The Treasury is working on proposals to extend subsidies for workers’ wages, according to reports in the Financial Times. It’s thought that updated measures could see the state top up the salaries of employees who are only able to work part-time. On the media rounds this morning, Foreign Secretary Dominic Raab suggested that the Chancellor is considering targeted financial assistance for ‘specific sectors’. 

A move from an all-inclusive offer of wage subsidies to targetted industries would be a meaningful shift in the policy, with businesses most heavily impacted by the new restrictions becoming the focus of the scheme. There is a clear distinction between businesses that can operate legally during certain hours — or operate at all — and businesses that cannot, which is perhaps why the Chancellor is considering ‘creative’ ways to make sure they still have access to financial support.

Yet extension of furlough for even these businesses still falls prey to criticisms over indefinite government payment of workers’ wages. This a criticism that Sunak himself is all too aware of, telling fellow MPs earlier this year that ‘leaving the furlough scheme open forever gives people false hope that it will always be possible to return to the jobs they had before’.

With around 9.3

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.

Or

Unlock more articles

REGISTER

Comments

Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in